Older customers are smarter than many marketers think they are, and they are willing to take their business elsewhere. Marketers seem to know that effective marketing, sales and service are essential for business and for survival in a highly competitive industry. Nevertheless, paradoxically, marketing and sales approaches may be getting worse for the largest segment (estimated at 60 to 80%) of the customer markets.
There is great lip service, as is seen in many annual reports, and the revered wisdom of consultants supports the need for quantum leaps in tried and true approaches to acquiring and retaining these populations. Yet, many rarely succeed in marketing and product sale improvement and delivering outstanding services to this significant share of their total market. And, often, rarely try. The penalty is growing for those uninformed marketers that fail to better understand these growing and affluent customers.
Companies have generally decided what customers want. Researchers assist companies in this task by creating statistical representations of customers. Data on individual customers is homogenized in profiles of "average" customers. This dehumanizes customers and inhibits marketers' ability to make empathetic connections with them. It makes claims of being 'customer-driven' at least marginally fraudulent because statistics rather than real customers have driven marketing processes."
The ad business is also in a deep funk because, and just as many client companies now suspect, too few agencies understand today's customers. A return to a healthy economy apparently already happening will not restore the ad business to health. Madison Avenue is beset by what David Wolfe, noted author and lecturer on marketing to older customers and our colleague, calls CYS (chronic youth syndrome). It has been unable to cure itself of the idea that youth rules the marketplace. The New Customer Majority (adults 40 and older) are shaping the leading values, views and behaviors of the marketplace. Even Gen Y reflects values, views and behavior that psychologists customarily associate with midlife.
Companies and ad agencies that remain fixated on youth and young adult markets would do well to study the New Balance story. Perhaps no company projected a better understanding of today's customers than New Balance. As the story goes, New Balance became the fastest-growing athletic shoe company in the U.S in the 1990's by connecting with the midlife values that now rule the marketplace.
What's more, while New Balance chose to go after aging boomer markets, it also outpaced its competition in young markets, giving support to the idea that younger customers are following the lead of middle age customers. Incidentally, New Balance didn't use famous athlete endorsements in its marketing. Such endorsements have less influence on the buying behavior of middle-aged and older customers. New Balance's younger customers followed suit by buying New Balance in spite of its having no Michael Jordan to hawk the brand. If older people can't ascertain an ad's relevance to them, they tend to tune it out.
Madison Avenue is alienating the largest, wealthiest and fastest-growing group of customers. Agency leaders need to call in experts on the values, views and behaviors that are typical of midlife customers. They need to train young writers, artists and media buyers to work in today's older markets. Otherwise, those young professionals will continue seeing customers through their frame of reference (the lens of youth), and creating ads that are disconnects with both the New Customer Majority and the younger customers they influence.
The famous bank robber Willy Sutton was asked why he robbed banks to which he replied, "Because that's where the money is." The people who run the ad business don't appear to be as smart as Willie Sutton.
A final thought: ad agencies aren't the only ones with CYS. It is pervasive in corporate marketing departments. If an enlightened ad agency cures itself of CYS, it must mount an aggressive campaign to rid corporate marketing departments of CYS through education.